Net income is a distinct accounting concept from profit. Net income can also be calculated by adding a company's operating income to non-operating income and then subtracting off taxes.[4]

Contents

Overview1

An equation for net income2

See also3

References4

Overview

Net income can be distributed among holders of common stock as a dividend or held by the firm as an addition to retained earnings. As profit and earnings are used synonymously for income (also depending on UK and US usage), net earnings and net profit are commonly found as synonyms for net income. Often, the term income is substituted for net income, yet this is not preferred due to the possible ambiguity. Net income is informally called the bottom line because it is typically found on the last line of a company's income statement (a related term is top line, meaning revenue, which forms the first line of the account statement).

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